DiMasi Co-Defendant Promises To Work With Prosecutors

BOSTON Sal DiMasi and his three co-defendants, scheduled for trial in a bribery and kickback scheme while he was Massachusetts speaker of the House, are now Sal DiMasi and his two co-defendants.

The other defendant, Joseph Lally Jr., the salesman of Cognos software, pleaded guilty Tuesday to secretly and illegally funneling hundreds of thousands of state contract dollars to DiMasi and two associates.

It’s never good if you’re going to trial when one of your co-defendants goes to meet with federal prosecutors alone. That’s what Joseph P. Lally did secretly back in February.

Tuesday, as gulls circled over the courthouse on the harbor, Lally broke from the flock of co-defendants insisting on their innocence.

It’s never good if you’re going to trial when one of your co-defendants goes to meet with federal prosecutors alone. That’s what Joseph P. Lally did secretly back in February.

“This” is a considerable and complicated “this.” It involves an alleged scheme, whereby Lally, a hard-charging salesman for Cognos software, paid off DiMasi for using his juice as House speaker to help Lally win state contracts worth $17.5 million. And when Lally — the salesman at the center — won the contracts, he allegedly dished hundreds of thousands out to DiMasi and two of “Sal’s pals.” But on Tuesday the center was collapsing.

“Well you know it takes an incredible reservoir of emotional and financial wherewithal to come to this point,” said Lally’s attorney, Robert Goldstein, in describing Lally’s predicament and his decision to join the government as a witness. “And it’s not easy to stand accused of federal crimes.”

Lally walked into the federal court with his family, a cane, a new hip and a big downside. He was facing up to 20 years if he went to trial and was convicted. As well, he also faced the loss of his house in North Reading and $30,000 the government had seized from his bank accounts.

Lally told the judge he’s on anti-depressants. The government offered to lighten his burden by recommending a two-to-three-year prison sentence if he agreed to testifying against DiMasi and the other defendants.

“Mr. Lally’s home was the subject of a forfeiture count within the indictment. So that’s a real risk having that in the indictment,” Goldstein said.

But Lally can keep the house, the government now says, and they’ll give him his $30,000 back too, a consolation of sorts on this, his 50th birthday.

“Did you commit that crime?” asked Judge Wolf to each of the counts.

“I did, your honor,” Lally said.

“Are you guilty of that charge?”

“Yes, I am.”

Soon enough the hearing was over, and somewhat unburdened, Lally walked out of the courthouse without his crutch.

“Today I took responsibility for my actions. And I will live up to my agreement that I have made with the prosecutors,” Lally said.

That agreement, of course, is the key to the government’s deal with Lally. DiMasi and his co-defendants chose not to attend the hearing. But DiMasi’s attorney, who was present, called Lally the “consummate salesman.”

“I’ve always thought my client’s chances are good. There was nothing new today,” said Tom Kiley, seemingly ignoring what was very new. “What the government read was their trial brief. There was nothing new for me.”

What’s new is the government now has a witness who may testify to its assertion that DiMasi got $65,000 funneled from Cognos Corp. through a lawyer who was on the Cognos payroll but said he never did any work other than passing the money on to DiMasi.

Before getting into his car, Lally reflected on this less-than-auspicious birthday.

“Unfortunately, it’s a bad day for myself, my friends and my family but I’m looking forward to moving on,” he said.

But as bad a day as it may have been, Lally’s plea might prove a worse day for the three men who were once his co-defendants.